JLS Cusom Homes to liquidate inventory

Executives at JLS Custom Homes, one of Oregon's biggest home builders, said today they will liquidate 70 new homes to clear out their inventory as sales prices continue to plummet in the region.

Owner Jason Sage said he expects the Beaverton-based company's revenues will drop to about $30 million this year, an 80 percent decline from the 2006 peak. But Sage said the company will not follow other major Oregon builders into Chapter 11 bankruptcy.

"We have enough of a relationship with the banks we can make this work," Sage said.

Sage said he wants to liquidate the homes because the pace of sales has slowed to a crawl and sale prices have dropped up to 35 percent below their original expectations. He'd rather unload the homes at a loss than continue to pay construction loans until the market improves.

JLS Custom Homes, one of Oregons largest home builders, said Thursday it will liquidate 70 homes to clear out its inventory as sale prices continue to plummet across the region.

Owner Jason Sage said he expects the Beaverton-based companys revenues will drop to about $30 million this year, an 80 percent decline from the boom-time peak. But he said the company will not follow other major Oregon builders into Chapter 11 bankruptcy.

"We have enough of a relationship with the banks we can make this work," Sage said.

JLS Custom Homes is the latest in a long line of major home builders pushed into trouble by the bursting housing bubble, tighter mortgage lending and rising unemployment.

The number of metro-area closed sales in January hit their lowest point since record keeping began in 1992 and the regions median home price $246,400 in March is 18 percent below the peak, according to the Regional Multiple Listing Service.

Sage said he wants to liquidate the homes because of the slow sales pace and small prices that have dropped up to 35 percent below his original expectations. Hed rather unload the homes at a loss than continue to pay construction loans until the market improves.

The sales should allow the company to start building again in some of its subdivisions, said Chris Kincaid, the companys sales director.

Sage and Kincaid said the liquidation sale will start April 27 and finish by June 30. They expect to sell nearly all the homes at a loss and more than half for less then they owe on the construction loan, Sage said.

In the 1990s, Sage worked as a framer for builders like Roger Pollock, Arbor Custom Homes and Legend Homes.

He started JLS Custom Homes in 1999 and built 15 new homes in 2001. He grew the company to a peak of 480 new homes in 2006 with about $140 million in revenue. It built homes from Salem to Hillsboro and all the way east to Spokane, Wash., and the Tri-Cities area in eastern Washington

When the housing market dropped, the company scaled back to 90 homes in 2008 for $50 million in revenue. This year, Sage said they expect to do about $30 million in sales.